Which of the following is a primary objective of macroeconomic policy?
A) achieving a zero rate of unemployment
B) achieving a zero rate of inflation
C) stabilizing economic activity
D) all of the above
E) none of the above
C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
A monopolistic competitor does not earn profits in the long run unless it can successfully differentiate its product in the minds of its consumers
Indicate whether the statement is true or false
Rivalry among firms would tend to be high if
a. Firms are located further from each other b. Firms are located close to one another c. There is only one firm in the market d. None of the above
When analyzing the housing market, the supply curve
a. will be upward sloping because the higher the price of a house the more that will exist b. will be horizontal to illustrate that the supply of housing is a stock variable c. will be downward sloping; that is what went wrong with the housing market d. will be vertical to illustrate that the supply of housing is a stock variable e. could be horizontal, vertical or upward sloping depending upon the housing market in question